After four days of negotiations to reach a collective agreement, The Warehouse workers have won themselves living wages, meaning all workers with 12 months experience or more will get pay rises.
More than 7000 workers will be paid at least $20.50 an hour, and this would increase further to $21.15 in August next year.
Kiri Henare, a retail worker from Auckland, said she was "so excited" about the outcome.
"Moving people to living wages changes lives," she said.
The deal will be taken out over the coming weeks to The Warehouse members to discuss and vote on, a statement from First Union said.
Last month around 1000 retail workers in Auckland held an impromptu meeting inside Westfield St Lukes mall to demand a living wage as a part of their Worth It campaign, which aimed to deal with what they called the pay crisis across the retail sector. The campaign aims to get workers a living wage as a minimum pay rate and enough secure hours of work to live on.
Kmart and Bunnings, along with some New World stores, earlier this year also committed to paying their staff the living wage. The union has also recently negotiated a pathway to living wage with H&M.
"Achieving a living wage for The Warehouse workers proves that low prices in retail are completely compatible with paying retail workers enough to live on," union spokeswoman Kate Davis said.
"Those large retail companies that are not yet paying living wages are becoming outliers. FIRST Union members are zeroing their focus on them, like Farmers Department Store, Pak'n'Saves and Cotton On."